Handy Sanitary District



Handy Sanitary District

Regular Meeting of the Board

December 2, 2010

Minutes

Attendees: Chairman Tim Loflin, Secretary Keith Loflin, Board Members Dan Caudle and Arlin Sechrist, General Manager Randy Welch, Clerk to the Board Renae Stafford, Attorney Frank Wells, Office/Finance Manager Lisa Hedrick, CPA Steven Scarboro

Guests: See attached list

Tim Loflin called the meeting to order and there were no guests registered to address the Board.

Approval of Minutes: The Board reviewed the November 9, 2010 Minutes and Tim Loflin discussed that at the November 9, 2010 meeting during the hydraulic study discussion when he had explained Harborgate’s connection of the 8 inch and 6 inch lines, he would like the record to reflect clearly that previous Board members have told him that it was not the Town’s but the District’s intent, to connect to the Town of Denton’s main line at Healing Springs and run the line down Hwy 8 to Harborgate. Arlin Sechrist made a motion to approve the Minutes as written, seconded by Dan Caudle, passed by the Board 4-0.

Annual Audit Report: Steve Scarboro presented the annual audit report (attached) and discussed the revenues and expenditures for the fiscal year’s water/sewer operations and capital projects. The Board reviewed the audit report and Steve Scarboro discussed that he could also attend the December 9 or another future meeting if the Board had any follow up questions. Dan Caudle made a motion to receive the audit, Keith Loflin seconded, passed by the Board 4-0.

Tim Loflin explained that Debbi Yarbrough was absent from the meeting due to a death in the family.

Town of Denton Water Rate: Randy Welch explained that the proposed rate from the Town is 1.2491 per 1,000 gallons, which equates to a savings of .16 per 1,000 gallons and will start in December. The Board reviewed the information provided that indicates how the rate was calculated and Steve Scarboro explained that the decrease is primarily due to the decrease in the percentage of water the District purchased from the Town. Randy Welch inquired whether the Town being without a general manager had affected the rate and Steve Scarboro confirmed that not paying that salary would reduce the expenses and therefore the rate. Randy Welch reminded the Board that the Town is in the process of looking for a new manager so next year’s rate may be an increase. Tim Loflin inquired if the Town had mentioned any plans regarding the water plant and Steve Scarboro discussed that he had not heard anything. Tim Loflin explained that he has heard that the Town has applied for funding for an upgrade to the plant and Randy Welch discussed that HUA has been working at the plant.

Employee Bonus/Annual Dinner: Randy Welch discussed that last year each employee had received a bonus in the amount of $200.00 and recommended the Board approve the same for the current year. He also discussed that he is planning a dinner for the employees and Board members as well as their families, to be held at the South Davidson Fire Department on Wednesday, January 5, 2011 at 6:00. Randy Welch explained that he the meal will be catered in and that covered dishes are welcome.

Badin Lake Sewer Project

Vacant Lots: Randy Welch discussed that the field staff has been working with HUA to determine the locations for tap installation on vacant lots and are running into issues because of unknown property lines and also because of property owners who prefer to wait five years from the construction’s completion before making their tap active, as the District’s policy permits. Randy Welch discussed a situation in which one property owner had paid a tap/pump fee but owns three lots which are willed to his three children and the Board agreed that the translation of the policy is that if the property owner did not make the tap active or request a refund by the time the five years passed, the tap would be lost. The Board also agreed that Randy Welch should notify the property owner of the policy. Tim Loflin discussed that Randy Welch should be given the authority to make decisions on a case-by-case basis depending on the individual circumstances, regarding whether or not the taps on each vacant lot should be installed. Frank Wells discussed that if taps on some of the vacant lots are not installed now by the contractors, the District should receive credit back for those.

Fish Tales: Randy Welch discussed that the contractors are getting ready to start work on some of the commercial connections and that Fish Tales Restaurant was on the list of taps to be made but was not on the list of previously approved commercial connections. He explained that approval for the connection would have to be made prior to the contractor getting started. Arlin Sechrist explained that Fish Tales was not on the initial list of commercial connections because it was not located adjacent to the force main. He further explained that the list of commercial connections had nothing to do with residents or businesses that were in proximity of a low pressure collection line and were required by the mandatory ordinance to connect. Arlin Sechrist agreed with Randy Welch’s recommendation that the Board’s earlier decision to exclude Whip-O-Will Campground from the mandatory connection ordinance because of their cost to connect, had set a precedent. He discussed that he would agree to allowing Fish Tales the same exemption and Tim Loflin inquired if he was referring to the Campground or the Restaurant. Arlin Sechrist confirmed that he would agree to exempt both from the mandatory ordinance since both were businesses not along the force main. Tim Loflin discussed that Whip-O-Will was exempted because of the Campground and that the Board had looked into the Fish Tales Campground but that nothing was ever found. He explained that the Fish Tales Restaurant should be entitled like everyone else was, but that the Fish Tales Campground should be treated like Whip-O-Will based on HUA’s findings. Dan Caudle discussed that that he could not support allowing more than $7,500.00 credit for the incentive tap/pump fee already paid and that the Board had made a terrible mistake in respect to the rest of the commercial taps. He discussed that the District would have been better served to allow those who purchased at the incentive rates, to own a tap/pump of an equal value of $7,500.00. Dan Caudle discussed that if these customers want a refund they should be allowed to get back the amount they paid, but that if they chose to connect to the system, they should be allowed $7,500.00 credit towards the additional engineering costs and installation. He explained that some people were lucky enough not to be required to connect by the mandatory connection ordinance and could choose not to. He discussed that Fish Tales Campground is similar in nature to Whip-O-Will Campground and Arlin Sechrist inquired whether the $16,500.00 estimate was the cost for connecting both the restaurant and campground. Randy Welch explained that the cost estimate was just for the restaurant’s connection. Arlin Sechrist inquired if Fish Tales is essentially requesting the District to give them $16,500.00 minus the $1,500.00 already paid and connect the restaurant to the system and Randy Welch confirmed. Arlin Sechrist discussed this was a lot of money and Randy Welch agreed and also explained that this connection is like those along Blaine Rd. in which each property owner paid around $1,500.00 but their connection to the system may cost the District around $16,500.00. Dan Caudle discussed that the District is giving people more than the tap they were promised and that he does not know where the Board gets off subsidizing people who are not even required to connect by the mandatory ordinance. He explained that because of the previously made decision to do so, now the Board is facing the current situation and that he felt that the District would be honoring its word by allowing all the customers the same financial value for the incentive taps/pumps that were purchased. Tim Loflin requested that Randy Welch verify with HUA that the sewer system could handle the flow from the restaurant and Randy Welch explained that he and Wes Carter have already confirmed that it could.

Property Acquisition: Randy Welch explained that Frank Wells has drafted the easement for the property in Pinehaven owned by Rhonda Earnhardt, and as discussed at the September 9, 2010 meeting, the District would issue a payment to her of $8,000.00 if approved by the Board on December 9. Arlin Sechrist requested confirmation of whether the District is actually taking ownership of the property or just acquiring right-of-way easement. Frank Wells discussed that he had been requested to draft the easement, but while doing so he was confused as to whether it was supposed to be an easement or deed because he had been under the impression that the latest negotiations included purchase of the property rather than easement. Renae Stafford read the discussion from the September 9, 2010 Minutes and the Board agreed that the negotiations included purchase of the property. Frank Wells recommended that it would be better for the District to purchase the property rather than acquire an easement if possible and Arlin Sechrist inquired if the lot was big enough for the District to use it for anything besides the sewer line. Frank Wells explained that the lot was likely to small for anything else and agreed to revise the easement into a deed in time for the December 9, 2010 meeting.

Election Request Draft Letter: Frank Wells explained that both counties have made findings of fact indicating that there were irregularities in the election and that as the numbers were such that there is a possibility that the results of the election were affected. He explained that Don Wright with the State Board of Elections has notified him that the District is on the agenda for sometime in December and that if the District Board is inclined to send a letter expressing their understanding of the need for a new election, as well as noting that they do not object to an order for a new election, it may prevent the Board members from being subpoenaed to the hearing. He explained that sending the letter was no guarantee, and that the decision of who will have to appear will ultimately be up to the State Board. Frank Wells presented a draft letter and requested the Board review and suggest any changes. He also explained that since a new election will likely cost the District money, the decision to send a letter or not should be voted on. Arlin Sechrist inquired what obligation would the counties have in sharing the cost and Frank Wells recommended that the Board consider authorizing him to discuss this with the counties’ attorneys. He further discussed that it was the District’s responsibility to provide boundary line information and the county boards of elections’ obligation to determine voter eligibility and to notify the District if they needed anything additional to determine such. Tim Loflin discussed that if the Board sends the letter, it may indicate that the District is willing to pay for the new election, and that the District’s boundaries need to be confirmed in writing, rather than just through a map. He discussed that Sexton Rd and a portion of South Main Street that are not shown on the map as in the District were supposed to be included in the original boundary. Frank Wells explained that the District’s legal description is what is used to determine what the boundaries are. Renae Stafford explained that the legal description should have been what HUA used to develop the boundary map in 2004-2005 and Frank Wells agreed. He explained that the problem with the map is that it does not show where the houses are in relation to the boundary line. Randy Welch discussed that Robbie Haltom will be working with the county GIS departments to overlay the District boundaries on a map with the 911 addresses of properties. Tim Loflin discussed that the District should not be working on this alone, but instead working together with the Board of Elections. Frank Wells explained that the decision of which voters should receive Handy ballots is that of the Board of Elections. Arlin Sechrist discussed that decision should filter all the way to the elementary level of the person handing out the ballot and Frank Wells agreed and explained that he has heard a lot of discussion about Davidson County poll workers asking voters whether or not they were Handy water customers. He explained that the new election can not be held until at least 75 days following the November 2 election and that there will be a new voter registration period. Tim Loflin discussed that the District should not have to bear the total cost since the problem was not all Handy’s fault. Randy Welch discussed that the Montgomery County Board of Elections Director Martha Griego has been working cooperatively with the District to resolve the issue, but that Ruth Honeycutt, the Davidson County Board of Elections Director has been standoffish. He discussed that at one point Ms. Honeycutt had said that the District had messed up and at another point had said that she had informed Keith Loflin when he interned at the Board of Elections that something was wrong with the District. Dan Caudle discussed that the State Board of Elections may want to speak with Ms. Honeycutt. Randy Welch agreed and explained that he also understood that only 3 of the 4 precincts in Davidson County would be open and that the cost was approximately $5,000.00 per precinct. Arlin Sechrist discussed that hopefully 2 precincts in Davidson County and 1 in Montgomery County could be open in order to meet the requirement of the statutes that at least 3 precincts must be open. Frank Wells suggested that he contact Don Wright, the attorney for the State Board of Elections, and express that the District Board agrees that there is a need for a new election but has concerns with admitting to being at fault in any way, and/or obligating the District to the total cost of the new election. The Board agreed and Frank Wells also discussed the District Board’s obligation to make sure elections are conducted correctly. He advised that in the meantime, the District’s work on correcting the maps should proceed. Randy Welch explained that Ms. Honeycutt has requested maps at the precincts to clarify eligibility issues to voters. Frank Wells explained that voter registration should be determined by the Board of Elections prior to the election. Tim Loflin discussed that the Board of Elections should have as much input as the District and Randy Welch discussed that he told the Boards of Election when the District was asked to clarify which voters were in and out of the boundaries, that they should research each voter’s physical address themselves. Tim Loflin discussed that he was concerned that the County Boards would instead use the District’s findings and Arlin Sechrist discussed that the State Board should be directing the counties on how to do their jobs. He also discussed that whether the counties are trying to comply with the state may be debatable. Discussion followed regarding voters’ responsibilities at the polls, as well as the poll workers’ responsibilities, and the District’s boundary lines.

Monthly Reports: Randy Welch explained that the water loss and financial reports would be handed out at the December 9 meeting or delivered earlier if available.

Manager Updates

Uwharrie Point letter: Randy Welch presented a letter he had sent to Uwharrie Point Community Association and explained that it was a follow-up to the recent meeting he had with them, and the Board reviewed.

Spruce Up: Randy Welch discussed that the office spruce up was complete including interior painting and the paving for additional parking spaces.

NCDENR Meeting: Randy Welch discussed that he and Renae Stafford had recently met with NCDENR reps and submitted the requested Operations & Maintenance, Emergency Management and Water Shortage Response Plan. He also explained that Harborgate was discussed at the meeting, regarding the hydrants that the developer was previously required to remove because of flow issues. Randy Welch explained that NCDENR has suggested that a master meter be installed at the entrance to the development and allow the developer to handle the distribution system inside Harborgate, which would alleviate liability for the District. Tim Loflin inquired how that would be done since the water lines are part of the District distribution system and Frank Wells discussed that the lines were taken into the District’s system when the lines were approved and certified and therefore are assets that the District has somewhat relied on when borrowing money. He also discussed that the developer would likely not want the responsibility and liability of maintaining the system. Tim Loflin inquired why the District can not put the hydrants back in since Harborgate’s water lines are part of the District’s system and Randy Welch explained that the hydrants must meet the required flows of 500 gallons per minute, in order to be reinstalled. Frank Wells explained that the developer had the opportunity to build a water tank inside Harborgate, which would have increased the pressures, but that he had chosen instead to remove the hydrants. Tim Loflin discussed that a letter should be sent to the Homeowner’s Association explaining why the hydrants were removed, who removed them, etc. Frank Wells discussed that such a letter should come from the state since the homeowner who has concerns about the hydrants has expressed those to NCDENR, and advised that the District should not provide the explanation. Randy Welch discussed that the Utilities Commission has informed the property owner that the issue is between the developer and the District. He inquired why the developer has so much control over the system in Harborgate since it belongs to the District and explained that the field staff can not even mark water lines without the developer taking pictures. Frank Wells explained that the lines that have been approved and certified belong to the District and that the developer has a history of installing lines without following the proper procedures. Tim Loflin discussed that the developer had previously not allowed the District’s field staff to enter in the gate to perform work on the system and inquired whether the District would be better off installing the master meter. Randy Welch discussed that the field staff has used a homeowner code to enter when the District did not have its own code, and explained his concerns with owning a system that someone else can do whatever they want to with.

Contract 1 Progress: Randy Welch explained that the 14 inch bore is complete and the crew is now working on the 16 inch.

Contract 3: Randy Welch discussed that Pump Stations 1 and 2 have power and have received final approval. He also discussed that power is currently being set on Pump Stations 5 and 6.

Ethics Training: Randy Welch explained that since Keith Loflin needs to complete the required ethics training by December 31, 2010, he would schedule a date before then for the District to access the webinar session. He also invited Norman Hunt and Karen Nash to attend and explained that way they would have their requirement met, if needed following the election issues being resolved.

Arlin Sechrist inquired whether Randy Welch is working with HUA to provide up to date estimates on sewer rates as previously discussed and Randy Welch confirmed that he is currently gathering this information.

Arlin Sechrist made a motion to move to closed session to discuss several items related to the Badin Lake Sewer Project, including the extension request responses, change order requests from Monroe Roadways and Terry’s Plumbing, and a NCDOT right-of-way issue. Dan Caudle seconded, passed by the Board 4-0. No action taken. Arlin Sechrist made a motion to move back into open session, seconded by Dan Caudle, passed by the Board 4-0. Arlin Sechrist made a motion to adjourn the meeting, seconded by Dan Caudle, passed by the Board 4-0. Adjourned.

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